Abstract:&nbspOne of the most striking changes in the composition of household retirement
savings over the past 20 years has been the shift from defined benefit to
defined contribution pension plans. Understanding the factors underlying
this shift is important for determining its impact on retirement saving
adequacy. Yet previous research, which has mostly focused on factors
affecting all firms, such as regulation or increased longevity, has
yielded little consensus. In this study we estimate the contribution
of changing workforce characteristics and production environments to
the shift in pension coverage. Our findings suggest that, while aggregate
factors explain a large part of the movement, changes in worker demand,
due to evolving workforce characteristics, also contributed notably. On the
supply side, we find support for the theory that technical change has reduced
the value of DB plans. These supply and demand factors are particularly important
for explaining the significant variation in cross-industry trends in pension coverage.